Buying or Selling a Residence

Buying or Selling a Residence

Have you ever stopped to think about how much you could save if you don’t use a realtor every time you sell a house?

Assume, for example, that in future years you sell three houses at an average price of $150,000. If you don’t have to pay a commission of 6% on each of the three sales, you will save $27,000. Of course, the average price of the houses that you sell could be higher, so your potential savings could be even greater. Furthermore, if you wisely invest the entire amount of the commissions that you don’t pay, the total amount could grow to a much larger figure.

If you are purchasing a house, you may be able to save by purchasing from a homeowner who is selling their house without using a realtor. Homeowners who don’t use a realtor to sell their house may be willing to sell you their house for less than homeowners who will have to pay a realtor’s commission.

If you do decide not to use a realtor, it would be prudent for you to take the following action as part of your strategy:

If you are selling a house, there are several things you can do to facilitate sale of your residence.

1. Prepare copies of a sheet of paper that provides relevant information about your house that you can give to potential buyers. The information should include the following:

Total square footage. Be sure to indicate that the figure is approximate, since an exact figure is difficult to determine.

Size of each room. Again, use approximate figures.

Average monthly bill for electricity, gas, and/or oil, based on at least 12 months of actual experience

Annual property tax, based on the most recent information

Dates when you made major replacements such as the roof, the air conditioning system, and/or the heating system

School districts for your neighborhood

2. Obtain copies of standard forms for purchasing or selling a residence:

Offer To Purchase And Contract

Residential Property Disclosure Statement

3. Make or purchase several “For Sale By Owner” signs and place them at locations where they will do the most good. For example, place a sign on a heavily traveled street near your neighborhood, another sign on a corner of the street where your house is located, and a third sign in the front yard of your house. Be sure to check with the homeowners before placing a sign on their lot.

4. Whether you place an ad in the newspaper, on the Internet, or both, make sure that the ad contains sufficient information. The more information that you provide, the fewer telephone calls you are likely to get from people who are looking for a house with different features than yours. For instance, if you advertise your house as a two-story residence, you are likely to avoid a lot of unnecessary telephone calls from people interested in a ranch-style house.

5. When potential buyers come to visit your home, plan to take them on a guided tour and be sure to emphasize the positive features of the house, especially the “extras” that may not be obvious. Also, be prepared for them subsequently to go back through the house by themselves.

If you are seriously interested in buying a house, it would be prudent to have it inspected by a licensed residential inspector hired by you. The standard terms of an Offer To Purchase And Contract allow a buyer to get such an inspection done before the closing, so matters involving repairs can be resolved on a timely basis.

Regardless of whether you are the seller or the buyer, there are at least a couple of things you should do.

It is generally a good idea to get at least one written appraisal on the residence by an independent appraiser. If you are the buyer and the seller already has a written appraisal, you probably can rely on it if it was done by an independent appraiser. If the appraisal was not done by an independent appraiser, you would be wise not to rely on it.

Even if you decide to use a realtor to help you sell your residence, you may still want to get an independent appraisal, rather than rely on an appraisal by someone associated with the realtor. Since realtors have an incentive to sell houses quickly, so they can get their commission faster, their appraisers may tend to appraise residences somewhat lower than independent appraisers do.

Make sure the terms of the Offer To Purchase And Contract protect your interests. Your final acceptance of the terms of the Offer should be contingent on the approval of your lawyer, especially if you are the buyer.

Copyright 2014 by Harvey Armour. If you have any questions or comments about this article, contact Harvey Armour at harveyarmour@yahoo.com. Mr. Armour desires to provide helpful insights from a Christian perspective on financial matters and difficult biblical matters. The information provided with regard to articles on personal or family money management is not intended to replace professional advice. Please consult with your own independent attorney and tax accountant to review and approve your financial decisions.